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lower-tier contract under which the commercial warranty would otherwise have been available.

It is considered desirable for the clause to include language that is limiting as to its scope of applicability.

VI. Implementation

Implementation of the Recommendation is deemed to be attainable by Executive action and as not requiring legislative action. A directive to the General Services Administration and to the Department of Defense to implement the Recommendation in the Federal Procurement Regulations and the Armed Services Procurement Regulations, respectively, under the conditions set forth in the Discussion would appear to be adequate.

VII. Dissenting Views

Concern was voiced that adoption of the Recommendation will give rise to situations where commercial warranties against infringement will be lost to the Government because of the omission of the contractual provision from a vendor's contract. This concern was especially expressed in relation to lower-tier contracts of systems-type prime contracts under which items of the type to which the warranties apply are generally furnished to the Government.

No written dissenting views were submitted.

FINAL VERSION

Proposed Executive Branch Position for

Recommendations 1-6 and 1-7 of the

Report of the Commission on Government Procurement

Rendered October 31, 1973 I. Summation

a. Recommendations

Authorize all agencies to settle patent infringement claims out of available appropriations prior to the filing of suit. (1-6).

Grant all agencies express statutory authority to acquire patents, applications for patents, and licenses or other in

terests thereunder. (1-7). The Recommendations appear on page 124 of Volume 4 of the Report, and are in Category A.

b. Proposed Position
It is proposed that the Recommendations be adopted.

II. Background

The Commission records indicate that the basis for Recommendation 1-6 was to provide patent owners with a uniform alternative for consideration of their claims of unauthorized Government use of their patented inventions which may be less expensive and more timely than a suit in the Court of Claims under 28 U.S.C. 1498. The records indicate that the consideration underlying Recommendation I-7 was to provide an opportunity in the Government procurement process for encouragement and recognition of private innovators who anticipate Government needs and thereby provide expeditious fulfillment of such needs as well as greater source selection opportunities.

III. Findings

The following findings were developed during consideration of the Recommendations.

Agencies will likely realize economies by adoption of the recommended authorizations because of the likelihood that patent claimants will accept a smaller amount as compensation for unauthorized Governmental use of their inventions in the absence of litigation expenses. Additional economies may also be anticipated where agencies acquire rights to use inventions covered by privately-owned patents prior to the Governmental use thereof.

The recent opinion of the Comptroller General in Decision B-178104 of May 4, 1973 that absent express statutory authorization an agency cannot enter into a license agreement with a patent owner either in settlement of past unauthorized Government use or to authorize future Governmental use of the owner's patented inventions emphasizes the need for the recommended authorizations.

IV. Conclusions

The benefits realizable by patent owners whose inventions are of interest to the Government, as well as those realizable by the Government, from the adoption of the Recommendations are deemed to be readily apparent from the Commission's findings and reinforced by the above-identified additional findings.

V. Discussion

The need for the recommended agency authorizations and the beneficial consequences to all parties concerned has been long recognized and are self-evident. Additionally, adoption of the Recommendations would obviate to a large extent the need for adoption of avenues of relief alternative to that in the Court of Claims, as for example contemplated by Recommendation I-8.

VI. Implementation

Enactment is favored of authorizing legislation as proposed in Sections 6 and 7 of the Draft Bill of Appendix B to Part I of the Report and concomitant repeal of all existing individual agency authorizing legislation as proposed in Section 8. These sections are located on page 154 of Volume 4 of the Report and a sectional analysis thereof appears on page 156.

The addition of the term "inventions" to the listing in Section 6 is favored in the interest of ensuring the applicability of the authorization to inventions which may not be the subject of either patents or patent applications.

VII. Dissenting Views

No dissenting views were voiced.

FINAL VERSION

Proposed Executive Branch Position for

Recommendation I-8 of the

Report of the Commission on Government Procurement

Rendered October 31, 1973

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